The Affordable Housing Income Conundrum in the Twin Cities

Seven years ago, I moved to the Twin Cities to start graduate school. The offer I received from the department was straightforward: Work with some great minds, with a full tuition benefit, and live on a fixed income for at least nine months out of the year. The income was set to about 150% of the federal poverty line, which seemed a bit low to me, but I had lived on less in the south during college, so it seemed doable. My adviser wasn’t so convinced. “Graduate students are a transient bunch here,” she said, “so don’t expect to be less so out there.”

And she was right. I moved 6 times over the next 5 years, and always in search of more affordable housing in a tighter and tighter rental market. My wandering took me from the Northeast neighborhood in Minneapolis, to Loring Park, to Seward, to Stevens Square, across the cities to the Payne-Phalen Neighborhood in St. Paul, and finally to Roseville, where I finally got off the affordable housing merry-go-round as my program wound-down. Now, I was lucky being white, well-educated, and southern, so my landlords often bent their vetting procedures for me, especially with respect to income limits. I spent as much as 50% of my fixed-income for some places, and none of them consumed less than 30%. Along the way, I often lived with friends or romantic partners, who had more or less luck that I did on different incomes, but for them it was generally the same story. Searching for “affordable” housing seemed like searching for a myth. Everyone had their own tales of housing hardship, but not one of us could explain them.

What is “Affordable” Housing?

The term “affordable” housing is a tough one to define. For starters, it does not actually define what is affordable. Instead it has an inverted meaning, in which the federal government, the state government, and the Metropolitan Council, work to set the parameters of what is “unaffordable.” So affordable housing is any housing that doesn’t fall within the parameters of unaffordable housing, depending upon who one asks and who may be providing the subsidies to build it.

For example, we know for a fact that the Twin Cities has an awful lot of housing that falls within the general parameters of unaffordable, but our public subsidies tend to target the affordable housing needs of very particular income groups. The difference between the general parameters and the particular needs of some people, especially low-income earners, often muddles how we define and discuss affordable housing. And, in this case, how we define affordable housing affects how we define the scope of the problem. Some people think affordable housing is a supply-side problem, meaning they emphasize that not enough of it has been added to the housing market to meet the demand (purchasing power) of certain income groups; while others, like me, think affordable housing is a demand-side problem, meaning we emphasize that certain income groups don’t have the demand to fully participate in the general housing market.

The federal government generally considers any household or individual that pays more than 30% of their before-tax income towards rent or mortgage to be living in “unaffordable” housing. The federal government’s definition doesn’t expand much further. But its housing agency, HUD, has historically offered housing development subsidies for projects in which at least 20% or more of the residential units in the development are both rent-controlled and occupied by individuals whose income is 50% or less than the area median income, and/or at least 40% or more of the residential units in the development are both rent controlled and occupied by individuals whose income is 60% or less than the area median income. For individuals, HUD provides vouchers for households or individuals whose income does not exceed 50% of the median income for the county or metro area in which the family chooses to live. And by law, public housing authorities must provide 75% of its vouchers to applicants whose incomes do not exceed 30% of the metro area median income. Development subsidies tend to target low- and moderate-income earners, while individual subsidies generally apply to the poorest third of households, so one can glean what affordable housing means to the federal government.

The state’s definition of affordable housing is also largely undefined. The Land Use Planning Act of 1976 (Minn. Stat. Ch. 473.895), also known as LUPA. It required cities to adopt comprehensive land use plans that included “sufficient existing and new housing to meet the local unit’s share of the metro area need for low- and moderate-income housing.” And it required the Metropolitan Council to judge the adequacy of these plans. But for many years the Council did so under the assumption that high-density housing in low-density cities was the mostly likely way to produce affordable housing (Goetz, Chapple and Lukermann 2002).

The Met Council, however, lacked the institutional authority to require cities to approve the construction of a specific number of affordable units (as planning and building were not the same). As one staffer told researchers much later, “We can’t say…you have to provide affordable housing. All we can say is that you have the opportunity to not discriminate against affordable housing” (Goetz, Chapple and Lukermann 2005: 254). The Met Council could hardly make a ringing endorsement for construction of affordable housing under such constraints.

In 1995, the state returned to the issue with the Livable Communities Act, or the LCA for short (Minn. Stat. Ch. 473.25). It gave the Metropolitan Council the authority to offer subsidies through the Local Housing Incentive Account (LHIA) to cities who approved, and developers who built, affordable housing projects. The Council for a long time considered affordable housing as any residence — whether rental, condo, or single family — that households or individuals making 80% or less of the metro-area median income could afford on 30% of their income. After the meteoric rise in property values during the mid-90s and 2000s, the council revised its definition of affordable housing to any residence that households or individuals making 60% or less of the metro-area median income could afford on 30% of their income. The grant funds covered “gap financing” costs such as land/property/structure acquisition, demolition, site preparation (such as water, sewer, roads), general construction/structural additions, alterations and rehabilitation, interior and exterior finishing, roofing, electrical, plumbing, heating and ventilation. Basically, they would cover the cost of construction so the owner wouldn’t need to charge high rents to extract a profit.

From 1996 to 2014, the LHIA fund leveraged over $100 million in public and private funds to assist with 650 new and rehabilitated affordable housing units. These investments seem like a significant response to the “mismatch problem” between supply and need, but cities used the fund primarily to build moderate-income instead of low-income residential developments. Only about 482 of those units were actually affordable at 60% of metro-area median income, and only about one quarter of them were affordable to households making 30-50% of the metro area median income.

And many of these subsidies targeted suburban communities after the Hollman v. Cisneros (1995) decision, in which the consent decree proscribed geographically concentrating poverty in particular places, and furthermore helped institute a nation-wide experiment in which the federal government and state governments tested a hypothesis that subsidizing greater physical mobility would result in greater economic mobility (Goetz 2002). The data is pretty iffy about the results, but nevertheless affordable housing dispersed throughout the metro area like never before.

From 1973 to 1983, the share of affordable housing in Minneapolis and St. Paul fell from 82% to 59% and, after a brief reversal of this trend in the late 1980s and early 1990s, about 80% of all new affordable housing has been built in the suburbs since 1996 (Dornfield 2011). The top five locations for new affordable housing units have included some of the fastest growing suburbs, including Shakopee and Woodbury.

The LUPA and the LCA have been successful in terms of the percentage of units now in the suburbs, but the total number of units produced has been an unmitigated failure. As Bill Lindeke (2016) has shown, most of the affordable housing is still in Minneapolis, St. Paul and the first ring suburbs. The Met Council (2006) furthermore has estimated that the metro area will be short 37,500 affordable units in 2020. If one assumes that standard households (2.3 people by the state’s definition) would occupy those units, which would represent a worst-case scenario, as many as 86,000 people in the metro area could be in immediate need of affordable housing at 60% of the median household income. That’s the rough equivalent of the entire population of Bloomington, or the fifth largest city in Minnesota. So “affordable” housing has the potential to be a significant problem even by its narrower definitions.

The Supply-Side Explanation

Myron Orfield, Tom Luce and many others (1997, 2010) have argued for years that the weakness of the Met Council and poorly planned cities are the reason the metro area lacks so much affordable housing. As Minneapolis, St. Paul, and the first ring suburbs have declined economically over the decades, and would have declined further without affordable housing policies in place, higher- and middle-income households have slowly migrated to the suburbs and left behind a lower-income population that does not have the financial means to support many profitable business activities, and furthermore does not have the financial means to contribute much to the property tax base through homeownership. In the 1980s, for example, eleven census tracts directly adjacent to Minneapolis or St. Paul had poverty levels in which 40% or more of population lived under the poverty line, and these households had limited ability to follow the jobs leaving the area. Due to the costs of living in market-rate single family housing, car ownership, and limited public transportation in low-density suburbs, those in need of affordable housing have little access to, or reason to, apply for lower wage jobs in the suburbs, and lacked the qualifications to gain higher wage jobs that could support a suburban lifestyle. Those low- to moderate-income earners were stuck without federal and state government intervention, and without suburban cities approving the construction of more affordable housing.

This narrative about housing development in Twin Cities is now forty years old, and much of the more recent census data still supports it, but some scholars suggest that more affordable suburban housing needs to be built regardless of the economic immobility in the urban core. Recent research from The Institute for Metropolitan Opportunity (2016) has shown that the affordability crisis has spread beyond the urban core into the second and third ring suburbs. The affordable housing problem from this perspective appears largely to be a supply-side one. Without the requisite number of affordable units, both in the urban core and in the suburbs, the traditional succession of households moving from lower-cost housing to higher-cost housing comes to a standstill.

Minneapolis, for example, has the three census tracts with highest population density in the state, and the most affordable units per capita of any other city in the metro area. But affordable housing units only comprised about 23% of all new apartment units between 2003 and 2013 (Metropolitan Council 2016). “As bad as the situation is now,” said Chip Halbach, director of the Minnesota Housing Partnership, said in 2007, “it doesn’t look like this situation is going to turn around” (Brown and Writer 2007). The average rent for an apartment in Minneapolis was $966 per month in 2013, and the market vacancy rate dropped from 7% in 2010 to about 2% a few years later (Baxter 2013).

In other words, former suburban homeowners are moving into the renter’s market, but Minneapolis and St. Paul do not have enough rental housing to accommodate growing populations that may not make enough income to own a home in a “rebounding” housing market. From 2000 to 2012, the number of households paying more than 30% of their income on housing grew from 448,000 to 567,000. In 2013, 30% of all households were cost-burdened by their housing, including 48% of all renting households, and 24% of those households spent more than 50% of their income (Metropolitan Council 2013). It required 17 hours of work a week at the state minimum wage to rent a one-bedroom apartment for a month at fair market value! (National Low-Income Housing Coalition 2015).

Recent evidence suggests that home values across the metro area are rebounding from the Great Recession, which bodes well for current homeowners and city budgets. But it may not mean a less expensive future for the next generation of the potential homebuyers. Fulfilling the demand for affordable housing has a long road ahead if the merry-go-round is a supply-side problem.

Figure 1.

The Demand-Side Explanation

The alternative and perhaps less considered explanation is that the affordable housing shortage is potentially a much bigger problem than building enough units to accommodate low- and moderate-income earners. With unemployment hovering at around 3.5%, or close to the traditional definition of full employment, the single-family market shouldn’t have greater elasticity than the rental market. This is especially true considering the rental market has the lion’s share of new construction starts, and the Twin Cities is a region with very strong market preferences for homeownership.

General household and per capita incomes have been relatively stagnant in the metro area since the late 1990s and early 2000s. Total residential property values grew by 500% between 1974 and 2010 from $37.5 billion to $220 billion, but then declines precipitously to 164 billion by 2012 (Figure 1). The median household income, meanwhile, grew by about 22% between 1970 and 2000, and then slowly declined by about 12% between 2000-2012 (Figure 2).

Figure 2.

The median household income grew from $61,300 to about $66,500 during that long period. This median is rather high relative to the rest of the nation, but as one can see it did not keep up with the growth rate of residential property values. The latter grew by 337% , even with a massive drop off during the recession, but median household income only grew by 10%. Per capita incomes, however, grew rapidly by about 175% between 1970 and 2000, and then declined by only 7$, so it kept closer to the growth of residential property values (Figure 3).

Figure 3.

The per capita income grew from $20,600 to about $33,500 during the period. This per capita is also rather high relative to the rest of the nation, but as one can see it too did not keep up with the growth rate of residential property values. This mismatch resulted, of course, in total wage income falling off the pace with the rise in total residential property value by the late-1990s (Figure 4). The relatively high median and per capita incomes in the metro area sometimes diverts attention from just how expensive it is to own a home today in the Twin Cities.

Figure 4.

For example, the median home in the metropolitan area cost $190,000 at end of 2012. Add to this amount a $19,000 or 10% down payment, 3% fixed-rate of interest over 30 years with immaculate credit, $354 per month for insurance premiums, about $1,900 per year for property taxes, and zero other total debts. So an ideal borrower, and a household or individual, would need to make $33,501 per year to own a home according to the FHA’s Mortgage Calculator. The per capita income was $33,532 for the metro area in 2012, meaning that, on their own, at least half of the Twin Cities population could not buy half of the available homes with a prime mortgage.

If I then adjust the financial qualifications of the per capita borrower to a more realistic level for the same home, to $9,500 or a 5% down payment, 3.94% 5-1 hybrid adjustable-rate mortgage, $1056 per month for insurance premiums, the same $1,900 for property taxes, and $266 in other debt payments per month, one would need to make at least $44,500 per year to own the same home. That would have eliminated about two-thirds of all individuals in the metro area from buying affordable property in 2012, and it would have eliminated about one-third of all households in the metro area from buying affordable property. Compared to the 1970s, for example, the 30% of total wage income threshold represents a significantly smaller percentage of the total value of residential property (Figure 5), despite the high rate of homeownership.**

Figure 5.

Based upon the graph, it’s probably not a coincidence that supply-side proponents starting shouting from the rooftops about the lack of affordable housing from the mid-1990s onward. Nor it is probably a coincidence today. Demand weakened as wages plateaued, and it is still weak now.

The average prime mortgage payment was $844 per month in 2012, which was $122 less per month than the average rent. Lowering housing costs in the immediate future, then, probably depends upon more low- to moderate-income households and individuals moving into the single-family housing market.

Unlike in the mid-1990s though 2000s, however, many of these people won’t be financing this move through the sub-prime mortgage market. It is currently very limited in its scope as a method of housing finance. Borrowers will have to do it through the prime-market, only this time, credit and money from banks isn’t so easy to come by. According to the Federal Financial Institutions Examination Council, 10% of the 29,190 prime loan applications, including FHA, FSA, VA and conventional mortgages, were denied for households or individuals making less than $66,500 in 2012. And 63% of all those denials came on the basis of the applicant’s income-to-debt ratio, credit history, or insufficient collateral. At a best case scenario, only about 67,100 people that year moved into single-family housing that presumably cost less than 30% of their income. A large swath of the Twin Cities population is still firmly in the old sub-prime market or unaffordable rental markets, and it doesn’t appear they will have increased economic mobility anytime soon. The number of applications for prime mortgages and the rate of denial has been consistent since 2012.

The inability of household incomes to keep pace with residential property values is a serious problem if you buy into the demand-side narrative. The median household income in the metropolitan area was about $75,000 in 2000, according to the U.S. Census Bureau, but reductions in general wages and working hours for new and existing jobs during the recession decreased the number of households earning the 2000 median income by about 6%, even with full time employment! Only 44% of households earned more than $75,000 in 2012, while 40% earned less than $50,000 (U.S. Census Bureau Single Year Estimates 2014). As long as household and individual incomes remain relatively static in the metro area, the economic mobility of people in the urban core and suburbs will continue to slow. Middle- and lower-income households at some point will become captive markets, if they are not already, unable to move into single-family homes or lower-cost rental units, because they are probably already occupying the lowest cost units available to them.

As an outsider looking in, and as a temporary participant in the affordable housing merry-go-round, the Twin Cities seems to have an income problem. In my opinion, the problem with affordable housing is just too big for it to be a supply-side problem. For all of its general income prosperity, especially compared to other places in the country, the Twin Cities region still has a mismatch between the enormous amount of residential property that has been created, and the ability of its people to pay for it.

*As the reader will no doubt note, most of the statistical information in this article is from 2012 or earlier. My reason for stopping at the year largely had to do with composition of the available datasets. At this moment in time, in early 2016, I can find complete datasets for 2012, whereas I cannot find complete datasets for all subsequent years. All dollar amounts have been inflation-adjusted to 2012 dollars.

**The homeownership rate of households in the Twin Cities is often used to rebut demand-side arguments. While it’s true that rates of homeownership here are generally very high in the Twin Cities, between 65%-70%, high rates of homeownership don’t closely correlate with measures of affordability. Indeed, the homeownership rate in the Twin Cities dropped by 5% due to foreclosures during the recession, which suggests many homeowners cannot afford the homes they own. High rates of homeownership probably correlate better with general housing preferences. People in the Mid-West region of the U.S., according to the U.S. Census Bureau, have historically preferred single-family homeownership. After all, about 72% of all taxable property in the metro area is single-family residential.

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About Benjamin McDaniel

I am a native of Norman, Oklahoma. As an undergraduate at the University of Oklahoma, I became familiar with Geography through Bret Wallach, a cultural geographer from the late Sauer years. As a graduate student, I continued in that academic lineage working with Rod Squires, a cultural geographer with interests in the history of public land, private property ownership and Native American treaty rights in the United States. My dissertation project began with a broad interest in the descriptive economic geography of U.S. urban real estate; an interest that evolved into a more specific focus upon the impact of state property tax policy on local government finances in the Twin Cities. I currently teach at North Hennepin Community College in Brooklyn Park

Should be interesting to see the comments section. I created a firestorm here some months ago when I noted that the cost of a new house has tripled in real dollars in the past two generations due to some combination of consumer demand, builder preference, and zoning and land use policies (that create a high minimum price for a lot which in turn require a McMansion to be built on it) And that this is forcing a lot of people with increasingly higher incomes into multi-family housing that don’t want to be in one.

I’ve murmured to myself in the comment section here and elsewhere that I kind of feel like some of the basic, underlying issues get left out of “affordable” housing conversations. (Which I don’t put in quotes sarcastically, it’s just that that doesn’t really have a specific, agreed upon definition, as you outline in the post.) Is housing in the Twin Cities generally expensive? Could be, maybe. There is certainly good housing available in Minneapolis for $500 or $600 or $700 a month, less if you have a partner or a roommate. It can’t be stated more strongly that this is not Manhattan and it’s not San Francisco.

If someone can’t pay $600 a month for an apartment, what’s the issue there? Is the apartment too expensive? Or is it because they have too little or no money? We’ve sort of worked out this weird system where we let Target pay people $9 an hour for 25 hours a week and then (hopefully?) the public sector kicks in a housing subsidy and a food subsidy and a medical subsidy and so on. Feels convoluted!

The only thing convoluted is your moral reasoning here. If people can’t pay a $600 rent for reasons outside their control (not only the economy but also could be disability, children and a lack of options for taking care of them, etc.), there is an immediate, urgent demand that these people have access to housing. It is an absolutely basic necessity, and should be treated as a human right. Allowing housing only to be built for middle-class incomes is a policy prescription for homelessness and chaotic, mass displacement.

It’s possible that in your race to disagree with me across four or more platforms under many different names, you’re missing that I more or less agree with you that housing, in this wealthy and powerful country of 300 some million people and tens of kinds of Doritos and minivans with automatic opening doors, could probably afford to be considered a human right. The question is how anyone is supposed to figure out how that’s supposed to work. Should there just be a basic minimum income? Should we funnel way more money to non-profit developers building $200,000 “affordable” units? Should there be far more actual public housing? Should the government own all the property? I would say probably not the last one, but to your credit, actual communism is probably the most coherent housing philosophy floating around–the current arrangement of “‘the free market’ but actually a huge and complicated array of subsidies (and restrictions!) for some good and some bad things depending on how different groups of lobbyists and other empowered people felt at some points in the past sixty years” is probably not good, and pointing out that it’s not good in an Internet comment section is not the same as stomping on babies.

Help me understand this, then. Your first comment suggests that people not being able to afford ~$600 rents is the real problem, not a lack of government support for housing supply. While increased minimum wages and more responsible employers are obviously laudable goals, a solution to urgent, real existing housing insecurity they are not, both in terms of their implied timeline as well as whether or not it’s even feasible to fully eradicate low incomes in general–especially given how private real estate markets, I’d argue, fundamentally necessitate exclusion and constantly rising prices. Moreover, your comment implies an outcome political climate in which tenants who can’t make rent get blamed for their own poverty, while the housing industry gets a free pass. That’s the opposite of treating housing as a human right–it’s treating housing first and foremost as a market-driven commodity and then building policies around that premise. I get that you don’t consider yourself an evil person or probably even a right-winger of any sort but my aim has and continues to be to demonstrate how the polices often advocated by a certain clique on this website, upon close examination of their ethical underpinnings, do not live up to any progressive standards of justice or equality. Feel free to disagree

I think it’s fair to ask that we take a broader view of the problems as they relate to people being able to afford housing and not have ones moral or ethical credentials questioned.

It’s a reasonable claim to question whether income policies or anything else Nick alludes to could be achieved in reasonable timelines or even to an extent that a doubling of the minimum wage could get rid of the issues that keep people in poverty. However, that skepticism should exist for any policy or grouping of policies; the complexities, timeline, and costs of making housing a right are trivial, yet other policies aren’t feasible or even truly progressive. For example, Singapore’s system, where over 80% of the population lives in homes built by the government, with an even larger majority of those owning them thanks to federal grants and residents’ ability to make down and monthly payments out of their social security system. While housing is basically viewed as a right, and highly affordable, this whole process started over 50 years ago! And, it’s still very exclusionary for immigrants and prices have still soared as it’s been treated even more as a means of retirement funding than here in America. Not that Singapore is your dream model, obviously, but I’m pointing out that there will be vast challenges implementing whatever change you’re proposing.

We can disagree that the housing market is intrinsically tied to exclusion or necessitates rising prices – both of those things are less true (or not at all) in other parts of the world. I guess I don’t think the housing industry should get a free pass, but I’d also think you’d be the first to recognize that the industry itself is heavily regulated and distorted by government policies for decades, to the point that it really hasn’t been able to meet the needs of many people across this country for a long time.

I share your concern over housing, as it’s larger than any other cost facing individuals or families most of the time, and it’s often the most susceptible to rapid changes (at least, for renters). But your take seems to be that nothing short of a fully public housing market, without considering other inputs and outcomes to things strongly related to housing (transportation, proximity to jobs, economic and racial integration, housing location and its tie to public schools, etc) is the only path to a better world for people without stable housing or prices. Correct me if I’m wrong here. We could make the bottom 50% of the housing market free but still have, I dunno, tons of problems if we build it all in Carver or Medina, yes?

I would hope we could find middle ground on a set of short-term policies that try to close the gap in making housing stable. If your goal is to come here and get people who you think should otherwise be more progressive to think a little bigger or different than we are (rather than pounding sand at people who don’t even want a 4 story apartment by their Lakeville single family home, let alone to make housing a right via taxes)… I think you can do better than anonymous comment handles posting mostly snark and parody twitter urbanist accounts that don’t move the conversation forward. I encourage you to try to engage us a bit more thoughtfully, maybe write some posts with a bit more detail and ideas brought forward on how we can change things. At what levels of government? What policies? Who are the people we need to engage with? What are the political hurdles?

None of the streets.mn writers or readers are perfect, but I’d hope you would see us as potential allies willing to listen, learn, and even challenge your thoughts as well. Feel free to disagree.

Well! If you’re considering urgency, I’ve got to say that changing the entire social and economic and political order of the country is maybe something that will not happen quickly. The overall system is not great and doesn’t make a ton of sense (see longer comment below) but it’s what’s going on right now. Maybe whether or not anyone thinks something is realistic is just a measure of how strongly they feel about it, I guess most of the stuff I think about transit is unrealistic and crazy.

In my free time as one of several boring hobbies, I advocate for a few things, one of which revolves more or less around letting more things get built in the city I live in. You can argue over the specifics, and sometimes people do take this generally correct argument to incorrect extremes, but I mean it’s really clear that overall, in the long term, building more housing is something that will make housing cheaper. And it’s something that I can actually help along and in a very small way makes some kind of difference! There are many other benefits to this in our current social and economic and political order, many of which work their way towards the people who aren’t living in an apartment building with a hot tub cantilevered over Lake Street. Those benefits are not limited to “eventually it will be cheaper” or even that it keeps prices down overall.

It’s not a competition, but you, in your free time as a hobby, are certainly welcome to agitate for whatever you want to agitate for! It’s a free country. Won’t pretend to know your whole life, maybe you inherited ten houses from your landlord parents and gave them away, who knows. Go organize a movement to seize private property and redistribute it! Though I’ve gotta say that my feeling is that like a lot of leftist movements, you’re really gonna stall out arguing with yourselves whether or not all your would-be public housing should have fireplaces before you break 5% in the polls. Which isn’t even a dig!

Justin Trudeau, Prime Minister of Canada, is advocating a Basic Minimum Income. You know, where the government mails everyone a check every year just for being a citizen.

I think changing the entire social and economic and political order of the country is actually extremely likely. I don’t really look forward to this.

I think it’s going to happen because the existing order has been failing to adapt for at least 40 years. I prefer it when the existing economic and political order can incrementally adapt, but when it is too rigid and fails to adapt over time, eventually it gets overthrown quite suddenly.

I’m curious — what policies do you think we should implement? Doubling (or even quadrupling) the state’s budget for affordable housing couldn’t do much more than shift annual subsidized construction from ~2k to ~8k (and the need is more like ~30k, depending on which numbers you look at). Nowhere near what is needed.

I’m not sure what other options exist, other than raising minimum wage dramatically.

For one adult with one child working 25 hours a week at $9/hour, MFIP (welfare) would provide $20/month and SNAP (food stamps) would be $317/month. Earned income, plus MFIP and SNAP would be $1,237. They would be eligible for Medical Assistance. They would be technically eligible for Section 8 vouchers at this income level, but the likelihood of getting one is small. They probably would have to wait a decade.

I agree. I originally started collecting these stats as parts of a study on property taxation in the metro area. Coming from super-libertarian Oklahoma, I couldn’t make much sense of the tax burdens in the metro area, or the state’s enormously complex set of subsidies for cities and households, or its general ambivalence toward actually providing some of those subsidies, until I realized state legislators can’t agree upon the basic problem. It’s possible that affordable housing problem started off as a supply-side problem, and remained so until the 2000s, when the gap between the production of residential property value and the consumption of it widened with the housing bubble. On the back of recessions in 2001 and 2007-2009, I think perhaps the affordable housing becomes a demand-side one. The issue I find with that shift, however, is that it changes the political conversation that needs to had at the state level. It’s a leap to move from speaking about meeting pockets of unmet demand through housing and property tax subsidies, to speaking about a general income deficiency and an asset bubble that might require a different income structure to fix it. That’s a tough political conversation at the best of times.

In reference to your other post, I like the basic minimum income idea a lot. It’s the only one that can move away from the labor theory of value, and subjective evaluations of the value of people’s work, and recognizes the necessity of all people consuming in a capitalist economy. The Fins and Swiss have come up with some interesting ideas about how to make it workout picking wage fights with businesses.

And your second paragraph, I think, is the underlying issue underlying the underlying issue. Whether or not capitalism is going to figure out how to transition to a post-industrial economy remains to be seen!

There is clearly just much less work to be done in the overall system…how do we manage that? We’ve clearly tried to use the market mechanism to do so, with mixed results. We’ve sure made up lots of jobs–without looking it up, I’m sure that the percentage of the economy involved in, say, HR consulting or claims adjusting, has gone up as the percentage of the economy involved in, say, manufacturing, has gone down. Maybe some of that is good, a lot of it is maybe just imagination and passing paper around to look busy. We tried making housing prices go up indefinitely for a decade, so we could all just endlessly buy and sell our houses and make money that way. That didn’t work out. We’re extending adolescence into our mid-20s, taking out lots of loans getting lots of paper credentials that say we know some things to ultimately work in corporate at General Mills, mindlessly sending badly-written emails all day.

Many others have dropped out of the regular economy entirely, or, their families or communities having not really been a part of it when deindustrialization started, never really joined it.

Anyway, the system is convoluted and broken. Pointing it out is easy! I’m sure if I were actually a policymaker in whatever Midwestern American city, and the choice were “throw $5 million at housing subsidies and help a handful of lucky people” or “don’t do anything and hope the entire economy is reworked to fix all the problems overnight” I would probably go with the former.

The Hollman v. Cisneros case cited here was an exercise in civic hypocrisy. Ostensibly a thrust to deconcentrate concentrations of race and poverty, in fact it was merely a means to help finance a redevelopment project with federal money and sweep the residents out of the area to be redeveloped. Meanwhile, for example, the Riverside Plaza complex owned by Sherman Associates. one of the City of Minneapolis’ most favored developers and landlords, continued unmolested with its population of race and poverty many times more concentrated than that of the Hollman area.

As to how the finances of the Hollman area redevelopment project played out, we’ve never heard a full accounting. I suspect it would not be a pretty picture.